Kerry council votes to retain property tax rates

A majority of councillors in Kerry have voted to retain property tax rates at current levels, and not to adjust the basic rates, after being told there is no point in any modest increase.

Councils can vary the basic rate of local property tax (LPT) to a maximum of 15% increase. However, any modest increase would lead to a cut in the amount of money the council gets from central funding, councillors on Kerry County Council were advised yesterday at a meeting to decide on budget strategy for 2016 and to set the LPT adjustment rate.

The council’s chief executive, Moira Murrell, told councillors: “Were members to increase the LPT by 1%, the net effect is we’d lose from central funding. There is no benefit to this council from an increase of up to 4%. Anything up to the value of €500,000 would not be in the interest of Kerry County Council.”

A 1% increase in property tax would see a reduction of €138,000 from central funding, and she said she was sure Kerry councillors would be prudent enough not to increase the tax.

Kerry collects €13m from property tax, but 20% of this, or just over €2m, will go to the department’s equalisation fund. The €2m will be redistributed to local authority areas that have lower property tax bases than Kerry.

Grants and subsidies from central government to the council will amount to just under €29m in 2016, and around €41m is expected to be collected from ratepayers.

The council has an annual expenditure of €124m, half of which goes on wages and pensions for staff. Its pension bill next year will be €7.9m while the council’s payroll will amount to over €53m. There will be a shortfall in 2016 of €3.5m, a sum which will have to be made up from expenditure cuts, Kerry’s head of finance, Angela McAllen, said.